Brad Barrett went from being a full-time CPA to retiring with complete financial independence by the age of 35 through diligent savings and investing. Now, as co-host and co-founder of ChooseFI, he’s empowering others to reach for a life of purpose, intention, and ultimately happiness through the journey to Financial Independence. Brad and his partner Jonathan have produced 200+ podcasts, have been downloaded over 9 million times, and have 200+ local ChooseFI chapters throughout the world. Brad relishes spending his days with his wife and two daughters as well as focusing on his health, fitness, and growing the relationships in his life. So, how do you become Financially Independent?
Financial freedom is something we all want in life, but it’s difficult to make it work for you. The idea that is engrained into our heads as an adult is to make money while you sleep and make money for yourself and not you for your money.
Brad breaks down financial freedom in a very easy-to-understand way. I loved his stories about the niche websites he’s created and how it generates some income for him. Really cool. Also, love how much he understands himself. He knows what he likes, he knows what he wants to invest his time and money into, and lives his life on his terms.
I think one of the hardest things to do as a business owner or even a human being is to understand what you want in life. I see companies failing due to the founder or leader not understanding what they want and if you’re clear and honest with yourself upfront first, then the rest will be easier to achieve. If you want to make 100,000k then so be it. But if you want more, you have to build the right systems in order to make it possible. And be willing to make the appropriate sacrifices in order to make sure it’s all possible. Brad does just that and I absolutely loved this episode. I hope you do too.
So now, how do you become financially independent?
Make a Life Plan
To you, what does being Financially Independent entail? A general desire for it is too nebulous a goal, so narrow it down. Make a list of how much money you should have in your bank account, the lifestyle you want to live, and when you want to reach it. The more explicit your goals are, the more likely you are to achieve them.
Then, working backward from your current age, set financial milestones at regular intervals. Put the target sheet at the front of your financial binder and write everything down carefully.
Make Savings Automatically
First and foremost, pay yourself. Enroll in your company’s retirement plan and take advantage of any matching contribution opportunities. It’s also a good idea to set up an automated withdrawal for an emergency fund that can be used for unforeseen needs, as well as an automatic donation to a brokerage account or similar account.
Ideally, the money should be taken the same day you receive your paycheck, so it never comes into contact with your hands and you are completely free of temptation. Keep in mind, though, that the suggested amount to save is a hot topic of controversy. The feasibility of such a fund can be a concern in various instances.
People may doubt this because of recent stock market volatility, but there has never been a better method to build your money than through investment. Compound interest will help it expand exponentially over time, but it will take a long time to reach meaningful growth. Don’t fool yourself into thinking you can be the next Warren Buffett by attempting to be a stock picker. Only one can exist.
Instead, register an online brokerage account that allows you to learn how to invest, and build a reasonable portfolio. And make automated payments to it on a weekly or monthly basis. To assist you in getting started, we’ve evaluated the finest online brokers for beginners.
Live below your means
It’s not difficult to live a modest lifestyle if you have the mindset of living life to the fullest with less. Before becoming wealthy, many wealthy people acquired a habit of living below their means.
This isn’t a challenge to live a minimalist lifestyle or a rallying cry to throw out all you’ve accumulated over the years. Making minor modifications by differentiating between what you need and what you want is a financially beneficial habit to develop.
Your Health comes First
The body, too, is subject to the idea of good upkeep. Invest in your health by going to the doctor and dentist on a regular basis. Seek medical advice if you have any difficulties. Many problems can be alleviated—or perhaps avoided—by making lifestyle changes such as increasing physical activity and eating a healthier diet. Sick days are limited in some firms, resulting in a significant loss of income after such days are used up. Insurance costs soar as a result of obesity and diseases. And bad health may necessitate an earlier retirement with a smaller monthly income.
Keep an eye on your credit file
When buying a new automobile or refinancing a home, your credit score impacts the interest rate you’ll be offered. It also has an effect on seemingly unconnected factors like vehicle and life insurance premiums.
The idea is that someone who engages in risky financial behavior is also prone to engage in risky behavior in other areas of life. Such as driving and drinking. This is why it’s critical to obtain a credit report on a regular basis. Ensure that you don’t have any erroneous black marks tarnishing your excellent name. To further protect your information, you might want to look into one of the top credit monitoring services.
Make a Budget
The easiest method to ensure that all expenses are paid and savings are on track is to create a monthly household budget and stick to it. It’s also a consistent practice that reinforces your goals. Be Financially Independent and strengthens your willpower to resist the need to splurge.